MUMBAI: The average lending rate on fresh rupee loans across the banking system eased by 6 basis points (bps) in August over July to 8.75%, with private sector lenders leading the decline, central bank data showed.
One basis point is a hundredth of a percentage point.
Private banks cut rates by 15 bps to 9.44%, while public sector banks lowered their average lending rates by 7 bps to 8.06%. Foreign banks saw a marginal 3 bps drop to 8.22%.
On outstanding rupee loans, system-wide average lending rates softened by 6 bps month-on-month to 9.32% as of end-August. Private sector lenders reduced rates the most, by 10 bps to 10.22%, while PSU banks trimmed rates by 3 bps to 8.70%. Lending rates of foreign banks remained unchanged.
The Reserve Bank of India ( RBI) has cut the repo rate by 100 bps so far this year. The one-year median Marginal Cost of Funds-based Lending Rate ( MCLR) of scheduled commercial banks (SCBs) was unchanged at 8.60% in September 2025.
The share of loans linked to external benchmarks (EBLR) rose to 62.9% of total outstanding floating-rate rupee loans at end-June 2025, compared with 61.6% at end-March 2025. Loans linked to the MCLR stood at 33.8%, down from 34.9% in March.
On the deposit side, the weighted average domestic term deposit rate (WADTDR) on fresh rupee deposits eased to 5.56% in August from 5.61% in July. The WADTDR on outstanding rupee term deposits of SCBs moderated to 6.87% from 6.92%. Private banks cut deposit rates by 5 bps in August, while PSU banks lowered theirs by 4 bps.
One basis point is a hundredth of a percentage point.
Private banks cut rates by 15 bps to 9.44%, while public sector banks lowered their average lending rates by 7 bps to 8.06%. Foreign banks saw a marginal 3 bps drop to 8.22%.
On outstanding rupee loans, system-wide average lending rates softened by 6 bps month-on-month to 9.32% as of end-August. Private sector lenders reduced rates the most, by 10 bps to 10.22%, while PSU banks trimmed rates by 3 bps to 8.70%. Lending rates of foreign banks remained unchanged.
The Reserve Bank of India ( RBI) has cut the repo rate by 100 bps so far this year. The one-year median Marginal Cost of Funds-based Lending Rate ( MCLR) of scheduled commercial banks (SCBs) was unchanged at 8.60% in September 2025.
The share of loans linked to external benchmarks (EBLR) rose to 62.9% of total outstanding floating-rate rupee loans at end-June 2025, compared with 61.6% at end-March 2025. Loans linked to the MCLR stood at 33.8%, down from 34.9% in March.
On the deposit side, the weighted average domestic term deposit rate (WADTDR) on fresh rupee deposits eased to 5.56% in August from 5.61% in July. The WADTDR on outstanding rupee term deposits of SCBs moderated to 6.87% from 6.92%. Private banks cut deposit rates by 5 bps in August, while PSU banks lowered theirs by 4 bps.
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